Boomers Are The Fastest Growing Renters?

I am speaking at Brad Sumrok’s national conference for Apartment Rentals in Dallas this Saturday, so I’ve been brushing up on my demographic research in that arena of real estate. There’ve been some interesting new insights.

The Millennial Impact

My consumer life cycle for real estate starts with apartments and multi-family homes for renters; that typically peaks around the age of marriage, which used to be age 26 for the Boomers and now is age 28 (and rising) for Millennials.

That has been one of the best segments in a roller-coaster bubble housing market that has made owning a home look much riskier, largely due to the rise of the Millennials bornrn by my rising wave of births definition, from 1976 into 1990. That would create a rising wave of new households and renters from 2003 into 2018.

But they aren’t peaking yet – and maybe won’t for quite a while.

First thing to note is that this younger group will extend the rental cycle in the downturnrn I’m anticipating from around 2020 to 2023 or 2024 as they get even more scared to buy than young folks were during the Great Recession. Under 35 buyers have to date bought at substantially lower rates than Boomers and Gen X did during the same ages. And Millennials will only find themselves trailing the older generations even more as loans get harder to get and the markets swing downside again for a few years.

It’s The Boomers

But more important, there is currently a new gang of renters riding into town: Aging Boomers. They have not saved enough for retirement, are increasingly down-sizing from larger homes now that they are empty nesters, and have seen scary volatility in housing markets for the first time in their life.

Look at this chart of growth in renters by age groups.

Damn… who would have thought. Renters 60 and older have grown the fastest, at 43% over the last decade. From 2017 to 2035 they will double from 9.4 to 18.6 million, growing faster than the 35–59 age group, and even more so than the slowing rate of those younger than 35.

By 2035 seniors will grow to 33% of the rental market and under 35 will fall from 34% to 27%. Older people have different needs, like no stairs! Don’t make them get one of those tacky stair sliding seat units… Please!

And where would you find the highest growth in such old fart retirees? In Arizona, Nevada, Florida and Texas – affordable and warmer retirement areas. But they are everywhere, as they have always been the biggest force at any age that their massive wave has moved into.